Three Ways to Build Your Credit Score From Scratch

A credit score is a three-digit number derived from your personal finance data. It tells banks how good you are as a borrower and of your ability to repay debt. The higher the score, the easier it is to get loans or credit cards at low interest rates.

Chicken-and-egg problem

It’s a classic chicken-and-egg problem. Unless you have a good credit history banks may not consider you for loans and companies hesitate to give you credit cards. Without taking loans or using credit cards, you cannot build a credit history.

Feeling stuck?

Worry not. There are options for those of you who are just starting out on your credit journeys. Get started by knowing all about credit scores and credit score parameters.

Now, it’s time to get down to work! Here are three easy ways to begin building your credit.

Apply for a credit card

Most often, it’s difficult to get approval for regular credit cards if you are new to the world of credit. Some banks might consider your application if you have an account with them, and some might have more relaxed eligibility criteria. Yet, there is no guarantee.

The quickest way to set your credit clock ticking is to get a secured credit card. These are cards that require some form of collateral, like your fixed deposit or a cash deposit, as security for the lender. Make your payments regularly, and within six to eight months, you should be able to rack up your first credit score. Lenders review secured credit cards periodically, and if you have maintained a good profile, you will soon be able to apply for unsecured credit cards, which are cards without any deposit or collateral.

Apply for a loan

Regular loans would be denied to you due to your lack of credit history. Jumpstart your credit history with secured loans. Similar to secured credit cards, you can avail secured loans against collateral. A few examples are - two-wheeler or four-wheeler loans, home loans, or loans against your fixed deposit or insurance premiums.

Become an authorised user

Your spouse or a family member can add you on to their credit card as an additional user. Using their credit card as a secondary user will get your credit score going and is a simple way to move up the ranks. But make sure to choose a card issuer who reports authorised user activity to credit bureaus to ensure it shows up on your credit report.

Lastly, be patient! Good credit scores that will categorise you as a non-risky borrower take time and consistency on your part. Don’t miss paying your dues, keep track of your account balances, and most importantly, stick with it! .

And while you are at it, understand what impacts your credit score and how to maintain your score in the long run too!


New to credit? Start building your credit history with P10 Bank. Download the app, check your credit score for free and see your eligibility to apply for loans and credit cards.